However, Chinese stockpiling explains only part of the COVID-era chip choke. The bigger cause is vast swings in orders for chips after the pandemic began, as companies and consumers adjusted their demand for different goods. PC demand spiked in 2020, as millions of people upgraded their computers to work from home. Data centers’ demand for servers grew, too, as more of life shifted online. Car companies at first cut chip orders, expecting car sales to slump. When demand quickly recovered, they found that chipmakers had already reallocated capacity to other customers. According to the American
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